A petabyte of data and counting

MTN (MTN) SA MD, Karel Pienaar, says that the group is ahead of the curve in terms of the ability for its network to accommodate a huge rise in data capacity.

The company head said that data has increased three-fold over the past year, with a petabyte of data passing through the network during February.

“We’ve gone through a petabyte of data in the blink of an eye. Since February last year, we’ve seen a three-times increase in volume of data on the network,” Pienaar said.

On Wednesday, MTN reported a 7.7% rise in revenue for its South African operation, for the year ended December 2011, to R38.6 billion rand – due to strong growth in data revenue, which was up 27.7% (excluding SMSes).

Data, including SMS, now accounts for 21.4% of revenue in SA – up from 19% in 2010, and 14.8% in 2009. Data excluding SMS accounts for 12% of revenue, it said.

When asked what its capex for SA was expected to be in 2012, Pienaar said: “It’s the amount of capex we can get into the ground and the speed at which we can do it. It’s never as fast we would like, but we are ahead of the hump.

“All we are worried about now is spectrum. This growth (data) we can handle still, we are not hitting headroom.”

Karel Pienaar

The total group capital expenditure guidance for 2012 is R24.401 billion.

The MD said that the group’s ambition was to “see everybody have a data connection” by 2020. “The challenge of this though, is that this growth is faster than we expected.

“The one thing that is limiting us now is spectrum. We are the most efficient utilizers of spectrum, by far, in the country. The problem now with the growth is that more spectrum is needed. If it gets withheld, or the rules are not well-defined, then you have a problem,” Pienaar said.

“I need clarity on how we are going to get more spectrum. I don’t need spectrum immediately – because I don’t want to provide cheaper, better quality faster services to customers today, too aggressively, if I can’t be assured that there is more coming,” Pienaar said.

“Spectrum is the most critical decision of this industry, and you need to make sure that you consider all. If you look at the ITA (invitation to apply), basically the people that were delivering to the people that need the spectrum the most, the people that make the biggest impact with spectrum to all the people of South Africa were excluded.

“Its atrocious, there is no other word for it; it’s just atrocious that they just got the pot wrong like this.”

He was critical of the time-frame in which the process has been conducted and described it as “a bit of a rushed job”.

Pienaar also questioned the watchdog’s methodology and allocation process.

“It’s a market of big players, that’s the nature of telecoms, it’s a scale business. It will cost me 1/10th to roll out LTE, than it would for someone rolling it out from scratch. There is no business model to roll out from scratch.”

He continued, saying that ‘scatiffying’ the spectrum – giving it to new players – would make it irrelevant, as it would not reach enough users.

“The point is, there is enough competition. We’ve got basically five operators, the competition is there. We are saying ‘guys (regulators), change the rules.’”

Pienaar said that MTN continues to roll-out more LTE sites. “We just need clarity.” He added that the group could roll-out immediately.

“It would irresponsible of us to go commercially, ‘we can re-farm that spectrum’. I can do the first year’s capacity – it just needs interim relief. Give the operators that are delivering interim relief, while [the regulators] are defining the long term,” Pienaar pleaded.